Eric Horvitz at Microsoft and others are using speech recognition and voice technology to displace medical assistants and receptionists.

Here is the Microsoft medical assistant:

“Hi, thanks for coming,” the medical assistant says, greeting a mother
with her 5-year-old son. “Are you here for your child or yourself?”

The boy, the mother replies. He has diarrhea.

“Oh no, sorry to hear that,” she says, looking down at the boy.

The assistant asks the mother about other symptoms, including fever
(“slight”) and abdominal pain (“He hasn’t been complaining”).

She turns again to the boy. “Has your tummy been hurting?” Yes, he
replies.

After a few more questions, the assistant declares herself “not that
concerned at this point.” She schedules an appointment with a doctor in a
couple of days. The mother leads her son from the room, holding his
hand. But he keeps looking back at the assistant, fascinated, as if
reluctant to leave.

Maybe that is because the assistant is the disembodied likeness of a
woman’s face on a computer screen — a no-frills avatar. Her words of
sympathy are jerky, flat and mechanical. But she has the right stuff —
the ability to understand speech, recognize pediatric conditions and
reason according to simple rules — to make an initial diagnosis of a
childhood ailment and its seriousness. And to win the trust of a little
boy.

I’m sitting in a somewhat stark room at Stanford
Hospital. Lots of equipment is attached to the wall and on carts in the room.
I’m talking to my friend Mark, who has been hounding me for more Grumbys to
play with. What a doctor wants with all that technology, I have no idea. Don’t
they just bang your knee with a rubber hammer?Mark explains that he got a pile of money from
Cisco, the networking company that has had an effort to create doctorless
clinics over the last five years with not much traction until Mark suggested a
Grumby.

“Hey, it looks just like Meredith Grey…Grey’s
Anatomy, right? The TV show?” I ask. It’s a stunning replica, cat like eyes,
medium length brownish hair, everything, down to the funny smirk.

“We argued back and forth whether to use her or
some old TV doctor, Dr. Kildare or something, but it became clear that no one
over about 35 would use this thing, so we went young.”

“Can I try it?” I ask.
“Sure. It’s an early model, but ought to work
pretty well. Just say hello and introduce yourself.”

I look Meredith Grumby in the eye and say
“Hello.”

And in Meredith Grey’s voice, the Grumby says, “Well,
it’s about time you show up. We don’t have any information on you. Let’s get
going.”

“OK.”

“Good. Now strip down to your skivvies.”

“Um,” I look at Mark, “is this part of the
program?”

“I’m a doctor. Grow up.” Meredith scolds
me.

“OK. OK.” I strip quickly.

Mark laughs and whispers, “It’s a power thing.”

“Wow, is that a roll of quarters or are you
just…OK, I’m kidding. But I do need some personal information.”

June 20, 2010

Even a win in the World Cup soccer tournament won’t save Europe. Nor will the G-20 meeting in Toronto this week. With Grecian urns, Irish eyes, Spanish flies, and Portuguese waterdogs all up to their eyeballs in debt, it’s only a matter of time before the whole venture implodes. Even after an almost trillion dollar bailout across Europe, Moody's Investors Service last week downgraded Greece's debt from A3 to Ba1--junk bonds.

We’ve seen this movie before—in 2008, when it was banks, not countries, reeling out of economic control. Once you recognize this pattern—desperate nations behaving just as the desperate banks did—the next 12 months of news will all make sense. Here is a handy guide.

Greece is clearly Bear Stearns. They’ve taken on too much debt, used derivatives created by Goldman Sachs to put off payment well into the future, and aren’t generating enough tax revenue to pay for their bloated expenses. The cost of Greece’s debt financing is skyrocketing, now 8 percent higher than the benchmark German bund. Either Athens defaults, causing more firebombs to be tossed and even larger riots in the streets, or the European Union arranges a takeover by deep-pocketed Germany.

Germany is the JP Morgan of this story. It will provide a lowball 200 billion Euros to Greece and then end up paying 1000 billion, reminiscent of JP Morgan offering $2 and then paying $10 for Bear Stearns. Now wait a second, I can hear you complain, countries can’t merge like companies.

Of course they can, it happens all the time—though usually when tanks roll. Ask Poland. Or Hungary. In this case, Germany won’t legally own Greece, but in reality, it will absolutely be in charge of fixing Greece’s mess. My sense is the Germans will be quite good at tax collection and not so strong at dismantling the welfare state. But Greek debt will be resolved and maybe the Euro will even rally.

But it won’t be over quite yet. That’s because sadly, Spain is Lehman Brothers. With 22 percent unemployment, and loaded with debt and deteriorating real estate prices, who is going to save it? Tongues will wag that defaulting on debts will teach a lesson to countries that live beyond their means. As a huge exporter, the carcass of a bankrupt Spain will be attractive to some country, probably in the Middle East, given Spain’s multicultural history. This country will be to Spain what Barclays was to Lehman, buying the parts of Spain it wants—say Barcelona—and dumping the wine business on France.

France, by the way, is Morgan Stanley; they have so many of their own problems that they can’t truly be part of any solution. Like Morgan Stanley, France will probably take some money from a large Japanese bank and then ignore them.

Italy, which always seems to drag down the rest of Europe, is, of course, Merill Lynch. It is not really good at anything in particular, though it has retail offices in the form of restaurants and pizzerias across the globe. Still, Italy is a net destroyer, not a creator, of wealth. Not wanting to return to the days when it cost 5,000 Italian lira to pay for a cup of espresso, Italy will (again) fall under the ownership and control of the German state, bringing flair and design to Germanic rigidness. A nice match. The Greeks only have islands.

The Euro, by the way, is Fannie Mae and Freddie Mac bonds. Banks around the world owned it because it could never fail. Oops—until it does.

Okay. I can’t believe I’ve gone this far without answering the real burning question: Who is Goldman Sachs? The United Kingdom, of course. Aloof and not really part of all that mess on the continent, the U.K. will probably make money shorting the rest of Europe and then become nervous that Greece and Spain will drag them down as the mess spreads. The U.K. will eventually come around and do what it can to help calm the markets. But it won’t matter. Everyone will still accuse the U.K. of being a giant squid or leech or mosquito, sucking the blood out of Euro-weenies until they cry uncle. Later, when things are more stable, the U.K. will be accused of fraud and benefiting from Europe problems. The U.K. won’t care because its citizens are all paid so well.

I’d like to say that Warren Buffet is Switzerland, but I think I’ve stretched this analogy much too far.

Just be warned. You can bail out Wall Street banks and recapitalize their balance sheets and someday they can start lending again (we’re still waiting). On the other hand, you can’t really bail out a country without massive structural changes, cuts in entitlements, huge reduction in government as a percent of GDP, and a rewriting of the social contract between government and workers. Often, bankruptcy or the threat of it is the only way these nasty tectonic-shifting changes can be pushed through.Andy Kessler is a hedge fund manager and author, most recently of Grumby. He has written for the Wall Street Journal, Forbes, Technology Review, The New York Times and elsewhere and has appeared on CNBC, CNN, Fox, NPR and Dateline NBC. He lives in Northern California with his wife and four sons.

June 11, 2010

Grumby is a novel, filled with the same funny stories as my
previous books, about a guy that creates the next greatest thing, a
device that
we all will definitely want to own, and winds tales around the
rollercoaster of
startups and VCs and Wall Street and privacy and rivalries and what it’s
like
to catch a tiger by the tail and not get bit.

June 2010: Kindle and other digital versions (pretty cool since i finished writing it about 10 days ago)

July 2010: Hardcovers for sale on Amazon

August 2010: Fine bookstores everywhere

Yes, we are doing it backwards from a traditional release schedule, because we can!

AT&T's Picturephone, shown at the 1964 World's Fair, was a huge flop. Apple's new iPhone 4, announced this week, has a front-facing camera for video chats. It might succeed, except that AT&T isn't providing enough bandwidth capacity.

First, the company won't allow two-way video to work over its data network. Second, AT&T just made bandwidth-intensive video expensive by dropping iPhone and iPad's $30 per month unlimited data plans and replacing them with a two-tiered plan of $15 a month for under 200 megabyte usage or $25 for two gigs. Not that I have a problem with AT&T charging me or the 2% of its customers who are heavy data users. I can always sign up with a competitor. Oh, wait. There are none. AT&T has an exclusive contract with Apple.

AT&T can easily build out enough capacity to handle heavy data users. But it may be playing a game of chess with the FCC over its attempt to impose "network neutrality" rules. The FCC (plus Google and friends) wants all users to have free rein to do what they want on the Internet and smart phones. AT&T just wants users to pay for excess bandwidth.

Both are fine and not incompatible goals, except that competition, rather than rules, will best set the right price and make it happen. But without more broadband capacity and much higher speeds, the productivity applications needed to drive the next wave of growth in the economy will be stillborn.